Yes, they are exactly what you think they are: knitted breasts. I'm being commissioned to knit these by an IBCLC in Orem who wants them for demos in breastfeeding classes. For some reason, it's easier for new moms to hold a fake breast than to hold their own. :P
For the pattern, I was given an already made breast and asked to mimic that as best as I could. Later, I'll search on Ravelry to see if it's a pattern or if it's something someone just made up. Some of these were trial ones while I figured out size and gauge and such. I have a few more to make. The yarn was supplied to me- based on the labels, it's some acrylic that she got on sale.
Margaret recognized them right away as breasts and tried to hold one up to me. She signed and said "breast," though her word for breast is hardly recognizable as such.